Electronic commerce (e-commerce) and online transactions are now widely used. One common type of online transaction involves an electronic payment by a first party to a second party, for example, to purchase goods or services. This electronic payment is typically effected by the first party entering payment card information (e.g., credit card information or debit card information) at his/her computer. Information pertaining to the online transaction attempted to be made, including the entered payment card information, is normally encrypted and transmitted over a public computer network (e.g., the Internet) and a financial network to different computers (e.g., a payment gateway, an acquiring bank's processor, a card issuing bank's server) which process this information in order to approve or deny the online transaction. Approval or denial of the online transaction is communicated to the first party via his/her computer and, if approved, settlement of the online transaction takes place between the first party's card issuing bank and the second party's acquiring bank.
While computer networking makes online transactions convenient and efficient, it also creates potential for fraud and thus one major area of interest with online transactions is fraud prevention. Accordingly, various security measures have been implemented to counter fraudulent online transactions. Examples of such security measures include data encryption, card security code (CSC) verification where an individual attempting to make an online transaction using a payment card is asked to enter the payment card's CSC, and address verification systems (AVS) where an address entered by an individual attempting to make an online transaction using a payment card is compared to a billing address known to the payment card's issuing bank.
Although these and other security measures help to reduce the potential for fraud, they do not entirely remove it due to factors such as identify theft, stolen or lost cards, etc. There thus exists a need for improvements directed to validating online transactions.